This week in Redefy Real Estate‘s roundup of housing news you can use, student debt delays home buying, fall won’t cool the hot summer market, improving markets attract more flippers, repeat buyers disappear and a German house makes visitors flip.
As Millenials “grow up”, the appeal of the suburbs is also growing.
The Pew Research Center, a think tank organization, defines “adult Millennials” as those who are 20 to 35 years old (born 1981–1996). A recent National Association of Realtors® (NAR) survey showed that just 17 percent purchased a home in an urban or city center area.
A whopping 48 percent of Millennials surveyed cited the desire to own a home as a reason for looking in the suburbs. Rising rents and home prices are pushing these young professionals farther from the city. Low inventory and fewer building projects of affordable housing in urban corridors has also contributed to the exodus, says CNBC’s Realty Check.
Millennials may start out renting in trendy urban areas, but the suburbs have an appeal they can’t deny. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out,” said NAR chief economist Lawrence Yun.
While Baby Boomers and Gen X’ers complained of credit card debt preventing down-payment savings, younger Millennials report high student loan debt as the cause. Edvisors reported that 2015 grads will be in debt a little over $35,000. Add to that their low median incomes (entry-level) ranging from $18,000 to $43,000 (by state), according to Business Insider.
This debt and student loan combo is resulting in an average of 6 years to save for a down payment. The average home purchase age is 30, with an median income of $77,400 (and still servicing student loan debt). Millennials with families cite the same reasons previous generations chose the suburbs: larger homes, land (bring on the chickens!), good schools and amenities.
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